Pretax profit will fall to VND4.5 trillion (US$237 million) this year, compared with VND5 trillion in 2009, Thanh said at a shareholders meeting in Hanoi Monday. Bank for Foreign Trade, also known as Vietcombank, expects deposits will rise 23 percent, while outstanding loans will increase by 20 percent, he said.

Vietcombank's interest costs are rising because there is a lot of competition between lenders to offer attractive deposit rates right now, Thanh said. In addition, the Southeast Asian nation's government has set a target of credit growth for this year of 25 percent, after lending surged 38 percent in 2009.

"Credit won't be very good this year because Vietnamese exporters of agricultural products depend a lot on the world economy, which hasn't fully recovered," Thanh said in an interview after the meeting. The government has also removed an interest-rate subsidy, making it more expensive for companies to borrow money, he said.

Shares in the lender fell 0.9 percent to close at VND42,800 on the Ho Chi Minh City Stock Exchange. They've declined 8.9 percent this year, compared with a 4.4 percent gain in the benchmark VN Index.

Hanoi-based Vietcombank plans to issue new stock to existing investors at a ratio of 109 shares for every 100 currently held, according to a document released at the meeting. The bank will also create more shares in the fourth quarter to increase its capital adequacy ratio, the document said.

The bank estimates pretax profit in the first quarter was VND1.4 trillion, Thanh told investors at the meeting, without giving comparable figures.